Could state end up paying new salaries in consent agreement? Detroit Council to talk legal analysis

Jonathan Oosting | MLive.comDowntown Detroit as seen from the roof of the Broderick Tower.

The Detroit City Council is expected to convene in closed session this afternoon to discuss a privileged and confidential analysis prepared by the city's law department.

While the findings of the analysis remain a mystery, we know it is related to the recent consent agreement with the state, and we know that several council members are pleased.

"It's the best news I've seen come out of the law department in years," Councilman Kwame Kenyatta said in a committee hearing on Thursday. "Lunch is on me."

Law prepared the analysis last week after union activist Greg Murray argued before council that the consent agreement violates the Headlee Amendment of the Michigan Constitution, which prohibits the state from mandating new services without reimbursing municipalities for resulting costs.

The agreement, designed to resolve Detroit's fiscal crisis, requires the formation of a nine-member Financial Advisory Board to oversee city budgets and hiring of a Program Management Director to oversee implementation of key initiatives.

The deal calls for the city and state to split the salaries of advisory board members, who each will make $25,000 a year, while the city is required to cover the full salary of the PMD, expected to earn triple figures.

"I think there's a reasonable chance that the Headlee Amendment will require the state to pay 100 percent of the salaries," said Council President Pro Tem Gary Brown.

"That will play out legally one way or another, but I just think it's probably in the state's best interest to voluntarily do it so they can set a solid salary that will be commensurate with the quality of people they are trying to hire."

While the state has recommended a large PMD salary -- up to $250,000, in fact -- it does not appear eager to amend the consent agreement or volunteer payment.

"I'd point out that this is an agreement approved and agreed upon by all parties: the council, the mayor, the governor and the treasurer," Sara Wurful, a spokesperson for Gov. Rick Sndyer, said in an email.

A Michigan Treasury Department spokesman said he was not aware of any plans for the state to cover the full salaries of the new appointees, but the city said talks are ongoing.

"Mayor Bing's administration has had consistent discussions with the state about all aspects of complying with the Financial Stability Agreement," said Chief of Staff Kirk Lewis, "and we expect compensation of the Program Management Director and the Financial Advisory Board to be resolved soon.

"The state or the courts will make the determination if the Headlee Amendment applies to their compensation or not and the administration will comply."

While council is expected to meet in closed session this afternoon, members may vote Tuesday to lift the privileged and confidential status of the law department analysis which prohibits them from speaking about it publicly.